They've accrued up losses of $43M, $40M and $35M in the 3 preceding years. Funny how that's considered financially healthy in the world we're living right now.
It feels like a very different situation than, say, Uber - where there's a question about if Uber can balance driver payouts and customer fees in a way where they make money. DO, instead, is already turning $1 in goods into $2 in revenue and they're just looking to grow enough so that $1 in potential profit covers everything.
If this wasn't hard tech, I would be worried, but this is hard capital intensive stuff and looks to me like they are doing fine.
If in 10 years there ends up being 1 independent cloud company, that would be a pretty amazing business. DO has a good a shot as any (only thing I can think off is AWS spins out). DO is so good that there I can't think of a worst case scenario being anything other than one of the big 3 buys them. Best case is the moon.
A provider like DO expects to have customers for many years. At 50% gross margins, $100 spent to acquire a $50/yr customer will be returned in four years. That may be an acceptable trade off.
One should probably create a personal checklist to see whether a company is doing well or not and then just make decisions based on the checklist.